In the aftermath of a disaster, there is usually a large shift in what people need, what is available, or both. For example, people normally don't use very much ice, but after a hurricane or other disaster that knocks out power, suddenly (a) lots of people want ice and (b) ice production is more difficult. Since people really don't want their food going bad, and they're willing to pay a lot to avoid that, In a world of pure economics, sellers would raise prices.

This can have serious benefits:

Increased supply: at higher prices it's worth running production facilities at higher output. It's even worth planning, through investments in storage or production capacity, so you can sell a lot at high prices in the aftermath of future disasters.
Reallocated supply: it's expensive to transport ice, but [...]

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First published:
January 17th, 2025

Source:
https://www.lesswrong.com/posts/tJnSkxhq9CzF4icb2/tax-price-gouging

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“Tax Price Gouging?” by jefftk

LessWrong (30+ Karma)

“Tax Price Gouging?” by jefftk